Current American Art Auction Commentary
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(A running commentary on recent major sales we have participated in or observed. We may have acted
as a buyer or seller in these sales, but no solicitation of art work offered by us is made or intended. We
continue to recommend that investors deal directly with us rather than participate in auctions we
Investment value is much too often sacrificed by those purchasing at auction without
professional knowledge.
Our purpose here is to  indicate market direction as suggested by  price trends.
We try to provide factual commentary, but all information is personal opinion only
                     Nine New Reasons to Buy American Art
Prices Are Up
Selected American Art is in demand and prices have firmed. Our review of year-end auctions is clear about this. New
highs are advancing, and records are being set. Oscar Bluemner's, Red Farm in New Jersey,  sold at Christie's in
December for $5,346,500--setting a record and adding to overall rising interest. A number of reasons underlie the
favorable trend--which is actually benefitting from the current recession economy. First (1) and foremost is relative
price stability. When it comes to volatility, American art relative to Contemporary Art and European Modernism is a
low beta asset class. That means its price swings are comparatively moderate and that it hugs the rising trendline
more closely. New collectors are attracted to this price stability as they exit hedge funds that have been hit hard by
declining stocks. And while we are on the economic causes, do note the persistent low yield environment--since
conservative yield oriented investors can't scratch up a penny's worth of interest, many obviously think its better (2)
to cut risk, enjoy the beauty of American art and wait for inflation and rising demand to provide for future capital
gains. Increasingly then, American art is becoming an investment of choice. Finally, from this perspective, with the
recession curbing home sales, (3) many homeowners are staying put and improving their castles, which means
greater demand for paintings overall. Simply put, masterpiece American paintings are much more beautiful than a
gold bar.

We were sitting there at Sotheby's when, in May (2012), Hopper's The Bridle Path brought $10,386,500 with buyer's
premium. While that's not as high as the $26,896,000 that his larger canvas, The Hotel Window, brought at the same
venue in 2006--it is still a clear indication of rebounding prices. And Christie's latest sales catalogue was heavy with
million-plus works, including a new Hopper estimated at $15-$20 million! And in 2013 Norman Rockwell went into
double-digit millions. But this was nothing compared to last year, when Rockwell's Saying Grace topped $46 million,
Hopper's East Wind over Weehawken beat $40 million, and we watched O'Keeffe's Jimson Weed top $44 million.

New Money Signals New Interest
The growing interest in American Art is a signal of new attention for these masterpieces. First and foremost in
raising attention was (4) the opening of the new American wing at New York City's Metropolitan Museum. The event
was eagerly anticipated and advance knowledge of its contents brought higher prices from dealers speculating on
stronger demand--even at a time when dealers are known to have reduced inventory and are holding a highly limited
number of works for sale. This accelerated a trend sparked when Boston's Museum of Fine Art opened its new
American quarters only a year earlier. Indeed scarcity (5) of high quality offerings is another reason for current
higher demand--pickings are slim as one dealer remarked to us. The dealer community was well aware that one of
the central features of the new wing was the giant canvas of Washington Crossing the Delaware by the history
painter Emanuel Gottlieb Leutze--so note that in the just completed American auction round Leutze set records for
three works offered including a sale over a million. And works by Bierstadt and Cropsey also saw accelerated
interest. Overall, collectors appeared to be responding to (6) rising patriotism and neo-nationalism stimulated by the
new wings, their focus on American history, the coming election and the recession overall. Newell Convers Wyeth's
historical illustrations outpaced the younger Wyeth's landscapes. Even New York's long hibernating Historical
Society Museum got into the act with a once in a century major revamp!

And in March 2012 word came from Boston's famous Skinner Auction that Constantino Brumidi's study for The
Apotheosis of Washington set the world record for the highest price ever paid at auction for a work by the artist. The study
was sold to the Smithsonian's American Art Museum for $539,500, exceeding its estimated high of $350,000. The fresco,
for which this painting is the final study, is found on the ceiling of the rotunda of the United States Capitol Building and is
considered to be the Italian-born Brumidi's masterpiece. It is widely considered to be the most important fresco in America.
The previous record for a work by Brumidi was $21,000, for, fittingly enough, a portrait of George Washington.

But Collectors Are Risk Averse
Overall the economy is driving new money into the American art market. But the new money is putting safety first,
and doing so as we have seen by moving into the Ameican art collectibles asset class. The new money is tightly
focused--wanting only the best of the best and sticking with the historical track record. In the just ended auction
round, this  was particularly evident in sales of the great American neoclassic realist Martin Johnson Heade. Buyers
were willing to pay more than a million for classic Heade works depicting orchids and hummingbirds--but his lesser
still-lifes of flower arrangements and more mundane landscapes struggled to reach a hundred thousand.  Collectors
are very tightly focused, and they want something American! Nineteenth-century still life work,  portraits and figure
studies are finally taking off--following gains by narrative studies by Brown and Moran, particularly showing
historical narrative or scenes showing poverty urchins in humorous poses or life on the plantation. And the new
buyers are (7) much less interested in abstract expressionism--which is everywhere showing signs of having peaked.
New buyers would rather hire a knowledgeable dealer to bid on classic American art rather than risk getting stuck
with abstraction--in the form of over-priced private visions without universal appeal--media hype has finally spawned
a backlash.

And Web Galleries Are Making A Big Difference
Slowly the web reshapes all markets. Discount brokers were once unknown in the stock market. Now they account
for most of retail trading by self-directed investors. Finally, the web is having its impact on the American art auction
market. More and more new money is spent on (8) web purchases of American masterpiece paintings. Our own
success as a gallery is a testament to this trend. In the past--now the ancient past--the major auction houses sold
almost exclusively to galleries, and these transactions were shrouded in high-priest mystery. Collectors from the
hinterlands toured brick and mortar palazzo metropolitan galleries off Madison Ave and paid through the nose for
their purchases and the imprimature. We were once advised by a gallery owner not to purchase at auction--only to
find the same gallery owner bidding against us and taking the work--and then we discovered a mark-up (note recent
law suits) that was shocking to say the least. Those days are dying--particularly as internet transparency makes price
information widely available to collectors. Web galleries (9) can make value-oriented collectors a lot happier when it
comes to future appreciation potential. New demand for American art is being satisfied in new ways--with shared
benefit for all!